Economic Cooperation in the South Caucasus and the Wider Region: Gained Losses, Lost Benefits

The past two and a half decades in the South Caucasus leave little hope to entertain for the eventual integration of the region. So far the fragmentation of the South Caucasus into different blocks is the only reality. The different integrational processes and transnational alliances that the South Caucasus countries have engaged in surely contribute to the creation of new spaces for cooperation, but also to the perpetuation of the conflicts in the region. In fact, often conflicts have been defining the design and implementation of these transnational alliances and integrational processes. With this reality, regional transnational integration as an avenue for conflict resolution seems to be part of a vicious circle since conflict resolution is often seen as a precondition for regional integration. This is not only due to the conflicts within and among the countries, but also to the complex and sometimes strained relations with the big neighbors – Turkey, Iran, and Russia.

This paper aims to explore economic options for inserting a wedge in this vicious circle. Convinced that regional economic cooperation could be an important step towards conflict transformation in the South Caucasus, this paper suggests that the prospects of such integration be considered. Be it in the form of exploring opportunities in the different integrational paths that the countries of the South Caucasus have taken or challenging the isolationist economic policies that have outlived their goals and utility, this paper offers all stakeholders to look at economic cooperation with rather than against each other as the option that could lead to the resolution of conflicts in the region.